Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

November Soybeans Struggle to Rally with Other Grains(written 5/17)

Old crop corn, old crop soybeans, and wheat all had a nice rally today. November soybeans however settled well of its highs. Here again, an ultra fast planting pace could be weighing on new crop pricing. Also, a little hotter dryer pattern may be affecting wheat and to a small extent corn but soybeans should fair well.

Soybeans have worked hard to buy acreage away from corn since the March 30th USDA planting projections report and, the fast planting pace has some experts thinking that we could see a jump double cropped soybean acreage. This could significantly loosen the tight ending stocks projections for next year.

See November Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Corn Catches a Nice Bounce Off of Lows(written 5/16)

July corn closed over 25 cents off of the recent low placed on Friday. Pressure late last week came mainly due to good weather, fast planting and a bearish USDA report. Last Thursday, in a surprise move, the USDA gave us an old crop corn balance sheet that saw a 50 million bushel increase in ending stocks. This came as a surprise because none of the private estimates had the USDA raising ending stocks. The USDA may have chosen to do this because they see an early planting as an indicator of a likely early harvest which could bring supply to the marketplace sooner then normal. Regardless of the reason it seems that the USDA has drawn a line in the sand at 801 million bushels for the 2011/2012 carry over.

This could mean that we have seen the most bullish old crop USDA report for the rest of the current marketing season. Also, with good weather and fast planting, bullish fundamental news events may be few and far between. However, we still haveChina. Today there were rumors ofChinabuying circulating the floor and we saw a positive outlook come back into the market. The other bullish factor out there is that even though we have the corn (at least the USDA says so) it seems that producers are holding tight for now. As I took a poll this morning of my clients it came to find out that on average guys were holding 20% in the bin and not looking to sell soon. This can an likely will be very supportive to basis and provide strength to the futures as well. This could provide good selling opportunities on weather scares but, the dilemma is where will we be rallying from on a weather scare. If good weather, a strong US dollar and weak outside markets break July corn into the lower $5.00 level then a $.40 rally on a weather scare doesn’t do much good even with a strengthening basis. I believe holding our current low ($5.72 in July corn) is key to holding and looking for a weather scare. If that low is violated then it may be time to move some cash corn.

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Pre USDA Report Thoughts(written 5/09)

The trade is mostly looking for a bearish USDA monthly report tomorrow. Grain markets reflect that as we have seen lower prices over the last week and a half. However, the average trade guesses are looking for large changes compared to last months report and I wonder how willing the USDA will be to make any wide scale changes this month. New crop supply is far from being determined and even acreage numbers will change dramatically from the USDA’s current estimates. Keep in mind that the USDA is most likely going to stick to their March 30 Planting Projections acreage estimates until they issue their own final plantings numbers on June 29. And, the USDA may choose to hold off for now on making any major changes to the old crop balance sheet as well for the sake of wanting to get a better handle on how far we will have to carry old crop supplies as an early harvest would take significant pressure off of old crop ending stocks.

So, if we do see an unchanged or a small change report tomorrow the likely knee jerk reaction will be that it is not as bearish as we have factored into the market and we could get a bullish reaction. But again, this would be based on the idea that we have spent the last week and a half pushing prices down in anticipation of a bearish report. However, it could be argued that good weather along with a record planting pace and a negative turn in outside markets were the real driving factors in the price decline and not the report. Ultimately, it looks like the dollar is poised to strengthen and it seems that speculators have been moving out of commodities with crude oil trading below $100 a barrel and gold under $1600 an oz for the first time in a while. Couple this with fast planting and good weather and it could be difficult to get a sustained rally at this time.

See December Corn Daily chart:

See November Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

New Crop Corn Tests Recent Lows (written 5/03)

December corn came within a penny of the March $5.23 low, however managed to close only down 1 1/2 cents. This could be the beginning of a triple bottom formation but, more likely, as we continue to knock on the door of new lows we could be set to take another leg lower. A close below $5.23 could likely result in follow through down to the psychological $5.00 support, however strong technical support is not found until $4.80.

Nearly ideal planting conditions along with good forecasted weather continue to pressure new crop corn. November Soybeans could have offered support to corn if the $14.00 level had been breached, however November beans failed to do this yesterday in dramatic fashion and posted an outside day reversal which could be a sign of a topping formation for soybeans. Without support from an extended soybean rally or weather concerns, the weight of massive planting acreage estimates and record planting pace may be too great for December corn to hold the important $5.23 level.

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

New Crop Soybeans Post a New High Close!

November soybeans were able to post an 11 1/2 cent gain today despite widespread pressure in grains as well as old crop beans. The May soybean contract has been experiencing higher then expected deliveries suggesting that near term price rationing may not be necessary for now. However new crop soybeans have begun to take on a life of their own as concerns over next years balance sheet continue. Huge corn acreage, as well as a record fast pace in planting suggest that we could be looking at very tight ending stocks for the 2012-2013 marketing year.

The record fast planting pace could dissuade producers from switching many acres back to soybeans as there is still ample time to plant corn. However, it does seem that price action in the last few weeks may have bought some soybean acres, and producers are looking to double crop soybeans wherever possible. If the November soybean contract is going to embark on a new leg higher it could produce another $.50-.70 cents upside potential, but it would need to happen in the next few trading days. November beans have tested the $14.00 level four times since the previous high close on April 2 and another failure at $14.00 could bring in massive technical selling. This situation will need to be monitored closely in the next few days.

See November Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Corn Finds Tech Support, Help from China

Both old crop and new crop corn contracts were aimed at testing major support levels after yesterday’s close. May corn had touched the $6.00 per bushel mark and closed just a few cent off it, December corn had touched $5.25 per bushel for the third day in a row. Thursday’s trade brought a reversal off the recent lows fueled by rumors of China poking around to buy some old crop corn. The old crop balance sheet is tight enough that any major China purchases could cause the need for price rationing. The initial strength driven by the China news was enough to bring in bottom picking activities as well as short covering as the timing of good news could not have been better. Funds were noted buyers of approximately 12,000 contracts. This sort of fund buying is usually technical in nature.

With this reversal off the lows it is possible that we could have a double bottom formation in May corn at $6.00, as well as in December corn at $5.20. From a technical perspective this could be the base for which a multi-week rally could build from. However, from a fundamental perspective it would really seem that although old crop corn could see the need for price rationing and therefore higher prices, it is difficult to build a case for an extended new crop corn rally with massive acreage and a record fast start to planting.

See May Corn Daily chart:

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Planting Progress (As of 4/17/12)

The USDA released the weekly Crop Progress report this afternoon (4/17) which came a day late due to an electrical fire at the USDA. No Comment on that… With ideal weather in most areas through the bulk of March and April Traders were looking for corn to be 18-22% planted at this point, compared to 5% last year. The USDA is reporting corn plantings at 17% as compared to 7% last week, 5% last year and 5% 5-year average. The biggest drag on planting was Texas reporting 54% planted vs 56% last year and 59% 5-year average. Aside from slower then usual plantings in Texas we did see some states post impressive progress numbers. Some standouts being: Illinois at 41%!?!, Indiana at 24%, Missouri at 39%, Kentucky at 59%, Ohio at 10% and Tennessee at 80%.

With the USDA reporting planting progress at a slightly slower pace of 17% compared to the trade expectation of 18-22% we could expect to get a slightly bullish reception to this report. The trade expectations may have been a bit optimistic however. Texas will get planted, and this report reflects the fact that conditions are nearly ideal. The simple fact that Illinois is 41% planted compared to 6% 5-year average is pretty bearish long term.

See December Corn Daily chart:

Wheat numbers were slightly bearish with the Winter Wheat crop condition improving to 64% good to excelent compared to 61% last week and 36% last year. Spring wheat is now 37% planted compared to 21% last week, 5% last year, and 9% 5-year average.

See December Wheat chart:

This means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn in the $5.00 range and new crop wheat in the $6.50 range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Soybeans post a new high close as corn is unimpressive

May Soybeans were able to put up the highest close we have seen since September of last year (4/12/12). Support came from outside markets as we observed a “risk on” trade day stemming from overnight comments by the Federal Reserve Vice Chairman Janet Yellen making a case for the Fed to continue to keep interest rates low for an extended period of time and saying that the Fed may need to take even further action to stabilize the economy (i.e QE3). Stocks, energies and commodities as a whole benifited from this as the US Dollar Index fell more then 50 points.

Export sales were better then expected for corn at 959 mt compared to trade estimates of 400-850 mt and 1122 mt last week. Soybean sales were a little disappointing at 636 mt compared to trade estimates of 750-1150 mt and 1112 mt last week. Wheat sales were as expected at 425 mt compared to trade estimates of 350-650 mt and 512 mt last week.

Again, soybeans had a positive day today even with weaker then expected exports but corn however had a difficult time staying above unchanged even with support from strong exports and supportive outside markets. And while it looks like soybeans are set to retest recent highs, corn can not seem to catch a bid. This has to be a little troubling for corn with what looks like favorable weather coming down the pipeline and a potentially record setting planting pace. It seems that strength in soybeans alone may not be enough to get corn to rally. It may take something like a late frost to burn out the early planted corn to get the market excited.

See Corn Daily chart:

See Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn in the $5.50 range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

In the wake of the 4/10 Monthly USDA Supply / Demand Report

The USDA produced a rather uneventful Monthly Supply/Demand report today, leaving corn ending stocks unchanged and lowering soybean ending stocks to just above the average trade guess. However, the markets responded with a sharp sell-off. This was partially due to an overall negative day for commodities. But even with commodities under pressure when the grains opened the pit session, the first half of the trade day looked like we could be shrugging off the unchanged corn ending stocks and embracing the widely expected bullish soybean numbers. Early on it seemed that the attitude of the trade was that even though the USDA left corn stocks unchanged, they certainly would have to lower their number in months to come. Then the day truned. I would suggest that there are a number of factors that have been growing behind the scenes of the bullish old crop corn and new crop soybean stories.

First off the IMF warned this morning that global exporters should be weary of lower prices in the next year due to slowing global demand. This could be suggesting that our seemingly tight new crop soybean balance sheet could be less of a concern, and with this expectedly bullish report I ask what new bullish news will we see for soybeans in the near future? Weather sure looks good and although some years that may suggest more corn planted, this year I think we have stretched that rubber band as far as it will go.

Secondly we saw a planting progress report from the USDA NASS yesterday evening showing corn planting at 7%, about a week and a half ahead of time. But that’s only part of the story, some of that early planting progress is coming from very good ground. Its not just that areas on the fringe of the corn belt are rolling forward faster then usual, but Illinois is 17% planted, Indiana 6% and Missouri is 23% planted. So, looking at today’s board it would be a very valid question to ask – then why is old crop corn having a tougher day then new crop? Because early planting generally means early harvest and we may not need to carry old crop supplies as far. And the USDA leaving the ending stocks unchanged suggests that there is no more price rationing needed to control old crop supplies. This weighed heavily on old crop corn today, and could continue to do so into the near future.

See Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn in the $5.50 range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.

Planting Progress??

The USDA released the first weekly Crop Progress report of the year this afternoon (4/03). Because of the ideal weather in most areas through the bulk of March Traders were looking for corn to be 5-7% planted at this point, compared to 1-2% last year. The USDA is reporting corn plantings at 3% as compared to 2% last year and 2% 5-year average. The biggest drag on planting was Texas reporting 48% planted vs 53% last year and 50% 5-year average. Aside from slower then usual plantings inTexaswe did see some states post progress numbers that we would not expect to have started planting this early in the season. Some standouts being: Illinois at 5%, Indiana at 1%, Missouri at 7%, Michigan at 2%!?! Nebraska at 1%, Ohio at 1% and Tennessee at 15%.

With the USDA reporting planting progress at a much slower pace of 3% compared to the trade expectation of 5-7% we could expect to get a bullish reception to this report. The trade expectations may have been a bit optimistic however, considering that in many areas crop insurance does not allow planting for another 2-3 weeks. If the current forecast holds we could be set to see a huge jump in planted acreage in short order. Texas will get planted, and this report reflects the fact that conditions are nearly ideal and we are ready to go.

For my brave friends in Michigan who have started planting corn, please call me as I would love to buy you lunch! HooRah!

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn in the $5.50 range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.